Gaming out a Phillie Phanatic Free-Agent Contract

The Chicago Cubs have basically admitted they won’t be signing impact free agents until they “clear some payroll,” with the only likely major moves being trading away star-level players rather than trying to re-sign them, despite having already cleared $15 million in salary, projecting for a decent win total, and having a very lucrative TV deal about to begin that could net them $50 million a year.

This is a long way of saying: I hate this offseason and I present to you the following speculative post on how much the Phillie Phanatic would earn in the offseason.

As you may have heard, the company that created the Phillie Phanatic tried to get out of its previous agreement to assign its rights to the Philadelphia Phillies “forever” (I’ll leave my lawyering critiques on the side for now). As a result, the Phillies sued the mascot company to ensure that it can keep the Phanatic from becoming a “free agent.” (Fun fact: the designer of the Phanatic also designed Miss Piggy and Statler and Waldorf!)

This leads to the obvious question: What is a reasonable contract for the Phillie Phanatic?

First, this is a business-only proposition. I assume that no mascot could actually lead to wins on the field, notwithstanding some amount of gamesmanship to distract the other team. Second, we’re only interested in the intellectual property here. I assume that the actual salary of the mascot portrayer is negligible.

Let’s try to quantify what a reasonable contract looks like. For what it’s worth, the Phillies paid $215,000 for the perpetual rights to the Phanatic in 1984, compared to $2 million for Mike Schmidt, their most valuable player.

Tangible Benefits: Merchandise Sales

Mascots in general can help generate revenue for teams, but the Phanatic is in a league of its own. According to this piece at Forbes, “Phillie Phanatic merchandise now accounts for about 10% of the overall retail sales at its home field Citizens Bank Park… making him a more popular sell than most players on the Phillies roster.”

That’s serious! Now let’s shamelessly conjecture. A few estimates pegged MLB merchandise sales around $3 billion (in 2014-15). Of those, ~12% of the revenues go directly to the teams ($40 million). One article from a few years back gave a down-year Phillies team a roughly 9% share of the MLB merchandise market (which still seems high). Let’s assume the Phillies make up roughly double that of a typical team — 6% of total merchandise sales. My math says 10% * 6% * $40 million = $240,000 in pure profit based on Phanatic sales alone.

I’m also assuming that most team mascots do not generate nearly the amount of revenue as the Phanatic.

In-person appearances are lower cost ($600 by one estimate, which seems wildly low — how did we not budget for Mr. Met to come to our wedding?) but can rack up a few tens of thousands for corporate events. Still, a drop in the bucket.

Intangible Benefits: How Much Is Publicity Worth?

This gets us into dicier territory. How much is the most popular mascot in baseball worth in terms of publicity? One estimate says “tens of millions.” The original creators are asking for “millions” (we don’t know what the actual dollar amounts are within the Phillies’ negotiations with them).

Perhaps a helpful analogue is the Phanatic’s Philly cousin, Gritty. One estimate places the publicity value of Gritty at $162 million.

Gritty’s fee is ~$3,000 an hour, compared with the Phanatic’s $600. Assuming this difference in value is indicative of difference in demand, the Phanatic’s publicity value is probably closer to 20% of Gritty’s (current) value, so why don’t we say $32 million?

Let’s assume the Phillies also pay some amount to market the Phanatic, placing him in ads, etc. In their lawsuit they say they spend “millions” on promoting the Phanatic. To be conservative, let’s set that at under $10 million. We can conclude that the Phillie Phanatic is worth at least $20 million in publicity a year.

By comparison, Mike Trout’s contract pays him $33 million for the 2020 season. Zack Wheeler, the Phillies’ big free agent signing this offseason, will make roughly $22 million in 2020.

Those publicity numbers are squishy though. Surely the Phanatic gives the Phillies more WARM (Wins Above Replacement Mascot) than Clark the Pantsless Cub, but is he really worth as much as some of the team’s highest-paid players?

I’d argue yes! Wheeler has an aging curve, and his value will largely be extracted in the first few years of his contract. Meanwhile, the Phanatic has no aging curve! The Phanatic is worth much more to the Phillies today than he was in 1984, something one cannot say of Mike Schmidt. Rather than think of the Phanatic in player terms, one must consider him like intellectual property. This would be akin to Disney buying Star Wars or The Muppets.

Although the Wheeler contract is a good comp, consider other players signed for around $20 million. They’re a decidedly mixed bag, including good (Yu Darvish, George Springer) and bad (Chris Davis, Eric Hosmer, Johnny Cueto). The Phanatic on the other hand is as good as a bet as you can have — a guaranteed mascot that can provide consistent value to a franchise even in a down year.

If the Philly Phanatic were a free agent today, it would be worth a star-level player contract and would still likely be underpaid relative to the intangible publicity value it brings to the squad.

I think the Wheeler contract (5/118) is a reasonable comp, but honestly I’m guessing that a Phanatic contract would be lower average annual value but lock in the Phanatic for a very long time. Maybe more like 30 years, $500 million ($16 million AAV).

My pick to sign the Phanatic as a free agent would be the Braves, because 1) they need personality for their new ballpark, 2) they need to wash the stain of the Tomahawk Chop off the team, 3) they want to steal value from an NL East rival, and 4) they have the consistent TV revenue to pay out a big contract for a while. Plus a rivalry between the Phanatic and the Phillies would be great.